New Hampshire governor's energy plan leans on nuclear, gas

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Dive Brief:

New Hampshire on Tuesday released a sweeping overhaul of the state’s energy strategy, calling for a “paradigm shift” that emphasizes low cost energy sources and shuns subsidies.

The plan includes a recommendation to redraft the state’s renewable portfolio standard to include zero emission resources such as the output from NextEra Energy’s Seabrook nuclear plant.

The strategic plan also seeks to insulate New Hampshire from “policy preferences of neighboring states” that pursue renewable resources that the plan assumes will be above market cost.

​Dive Insight:

Trumpeting what has been called a New Hampshire-first agenda, Gov. Chris Sununu (R) and Office of Strategic Initiatives Director Jared Chicoine this week released the state’s new 10 Year State Energy Strategy.

The driving force behind the strategic plan is the high cost of energy in the state, which the plan calls “among the highest in the nation.”

Citing Energy Information Administration data, the plan says that each New Hampshire resident on average spent $3,934 on energy in 2015. According to the plan, the high cost of energy in the state puts New Hampshire businesses at a competitive disadvantage.

To address high costs, the strategic plan seeks to re-align the state’s energy policies, by prioritizing cost-effective energy production and delivery. Key among those options are nuclear power and gas-fired generation.

Nuclear power generated nearly 56% of New Hampshire’s energy in 2016. Preserving Seabrook, the state’s sole nuclear plant, is the most realistic and cost-effective means of managing emissions in New Hampshire at scale, the plan says.

The plan also says the state needs to be “realistic about the necessity of natural gas [generation] into the foreseeable future.”

In 2016, natural gas accounted for about 25% of New Hampshire’s generation and renewables accounted for about 17%, about 9% was from biomass, 6% from hydropower and the remainder from solar and wind generation.

Renewable energy is highly likely to continue to grow as a percentage of total electricity generation in New England, the plan says, but that growth has been largely driven by preferable tax treatment, subsidies and government mandated preferences.

New Hampshire should not mimic neighboring state renewable energy policies, the plan says. Instead the plan calls for a redrafting of the state’s renewable portfolio standard now set at 25% renewable generation by 2025, to include nuclear power as a renewable resource.

It is unclear if such a plan would include direct payments to nuclear generators, sometimes called zero emission credits or ZECs. A call to the governor’s office for clarification was not returned by press time.

Seabrook’s operating license expires in 2030. NextEra Energy, the owner of the plant is seeking an extension of the license to 2050.

The plan also calls for a re-examination of the state’s net metering policies for solar power, which are currently grandfathered through 2040. The plan says state regulators will soon open a new proceeding to revisit its net metering policies.

The plan also finds room for energy efficiency, which it calls the cheapest and cleanest energy resource. But, again, the plan stresses costs, saying that each dollar invested in energy efficiency should yield at least a dollar of savings.

The strategic plan also seeks to guard New Hampshire against the effects of other states renewable policies. The plan cites Massachusetts’ program to procure 9,450,000 MWh of renewable energy annually. It says those purchases will be at above market rates and could distort market prices.

The plan says that states should be free “to impose above-market costs on their citizens for policy reasons,” but one state “should not shift above-market costs onto a neighboring state’s ratepayers by distorting the wholesale market.”

To address that situation, the plan advocates that New Hampshire should seek regional policies that allocate costs according to each state’s preference for higher-cost resources.

The plan recognizes, however, that “New Hampshire policies alone cannot insulate our state against cost-drivers from our neighbors. Regional policy reforms are necessary if New Hampshire is to avoid increasing energy costs.”

The strategic plan is designed to serve as a guide to policy makers. How it is implemented, or not, could be determined in the state’s legislature.

The New Hampshire Union Leader reports that three bills before the Senate Energy Committee could serve to further the goals of the new strategy.

Two of the bills call for more transparency on electric bills regarding costs associated with renewable mandates. A third bill would require the state’s regulator to advocate on behalf of New Hampshire when negotiating on regional energy issues.